On October 15, the Department of Health and Human Services Office of Inspector General (OIG) released an advisory opinion (No. 13–13) finding that a non-profit community health services organization would not face civil monetary penalties or anti-kickback law sanctions if it began billing Medicaid for dental services provided to its patients, while continuing to provide free dental services to uninsured and underinsured low-income children.

According to the opinion and facts provided by the requesting non-profit organization, virtually all of the pediatric patients the organization treats are either Medicaid beneficiaries or are underinsured or uninsured. The organization stated that it has treated all of its pediatric patients free of charge for its services, which are reimbursable under Medicaid. However, the organization also stated that it was considering seeking reimbursement from Medicaid for those patients who are covered under the program, but would continue to provide its services to underinsured and uninsured children for free.

Further, the organization asked the OIG whether this proposed new arrangement would result in monetary sanctions or exclusion from federal health insurance programs, or sanctions under the anti-kickback law. Of particular concern to the organization was §1128(b)(6) of the Social Security Act, which allows the OIG to exclude providers from Medicaid for billing the program “substantially in excess” of the “usual charges” for billed services.

In its advisory opinion, the OIG stated it “has never excluded or attempted to exclude any provider or supplier that provides discounts or free services to uninsured or underinsured patients.” The OIG stated that it “does not consider free or substantially reduced charges to” underinsured or uninsured patient in enforcement decisions relating to §1128(b)(6).

The OIG also stated that it would not pursue any monetary or exclusion sanctions if the organization started billing Medicaid for pediatric dental services but continued to provide them for free to underinsured or uninsured children. The OIG specified that there would be no anti-kickback issues from the proposed arrangement because no payment or other inducements payable by federal health care programs were provided to the organization’s patients.